Is Treasury Declaring Open War on Crypto?

The fallout from the U.S. Treasury Department’s Office of Foreign Assets Control’s unprecedented action blacklisting Ethereum coin mixer Tornado Cash and associated addresses continues to spread through the crypto community with some leading voices saying that this action amounts to the U.S. government declaring war on anonymous cryptocurrencies. 

We agree. 

“Those adamant about Tornado Cash’s underlying neutrality fear that Monday’s decision is only the tip of an iceberg. To them, the U.S. government could now justify banning pretty much any service or product, on account of the fact that it could be used to achieve a nefarious end. 

“’They could do this with anything,’ said MakerDAO delegate Chris Blec, to Decrypt. ‘They could say tomorrow that peanut butter is illegal: if you buy it, use it, eat it, you're going to jail. And nobody's gonna buy or eat it or use it. This is called totalitarianism.’”

Blec states in the article that the U.S. government won’t be satisfied until they outlaw private individuals conducting transactions in digital money anonymously.

“’There is no cryptocurrency that can't be used by bad people,’ said Blec. ‘So all open blockchain technology is susceptible to this kind of attack. The only way for the government to solve this is to have full knowledge of every single [user’s identity].’”

Ethereum core developer Micah Zoltu was asked what actions Ethereum miners could take to mitigate the risk of validating potentially illegal transactions, he cheekily replied. “My broad recommendation to people is don’t be a U.S. citizen. It’s too dangerous.”

Which is a bold statement, but not out of the realm of probability, as capital and talent will simply route around the blockage and seek nations that don’t employ a nuclear option on the industry.

Some are calling for open defiance, escalating the conflict between the community and overzealous regulators.

“We can be sure this crackdown on privacy will not stop with Tornado. Particl remains convinced that strong encryption and distributed systems will ultimately create the environment needed to resist this control, by empowering individuals to opt out of the legacy financial system. https://t.co/P5X1x7rIvw” 

The crypto community may hold diverse opinions on a lot of issues but the core values of everyone involved are privacy and decentralization.

We believe the community has to stand up against this overreach if it’s going to preserve those core values.